As part of a bid to deliver annual savings of between $200 and $300 million dollars, Biogen Idec yesterday unveiled a new restructuring programme – including a 17% shaving of its workforce.
Although the US biotechnology company saw second quarter earnings boosted, it has taken a knocking in the wake of its withdrawal of the multiple sclerosis drug Tysabri (natalizumab) – a move that was rapidly followed by a flux of lawsuits and an investigation from the US Securities and Exchange Commission concerning insider trading [[03/05/05a]], [[01/03/05a]].
In a statement, the firm said: “While Biogen Idec is well poised for near-term success, we believe that to continue to deliver for patients, employees, and shareholders requires a bold reshaping of the company in an effort to generate high-level, sustainable growth beyond the current decade. The first step in executing our new plan is to discontinue activities and programs that are unlikely to create significant value and reallocate our intellectual and financial resources to growth projects.”
Biogen Idec and partner Elan Corporation are still hoping for a return of Tysabri to the global stage, but in the meantime the US firm will focus its energies on its first-generation MS drug Avonex (interferon beta-1a) and its big selling cancer drug Rituxan (rituximab), which has recently been filed for a new label of rheumatoid arthritis [[01/09/05f]]. Another hopeful star in Biogen Idec’s stable is Panaclar – or BG-12 – which is slated for launch in Germany in the near future.
Some 650 jobs are expected to go, across company functions, by the end of the year – resulting in a pre-tax severance charge of between $30 and $40 million. In addition, non-core assets – including a clinical manufacturing facility in San Diego and its psoriasis drug Amevive (alefacept) - will be given the chop. The latter had revenues of just $43 million in 2004.
Biogen Idec also expects to earmark approximately $200 million a year for business development and external research opportunities starting in 2006 (versus $50 million in 2005). This money will be directed to in-licensing, collaborations and acquisitions, as the company looks to long-term growth and the build-up of its product pipeline.